economy
01. economy By most metrics, the labour market in Metro Vancouver is operating as efficiently as ever, but there are potential setbacks on the horizon.
A ROBUST LABOUR MARKET, FOR NOW
The labour market in Metro Vancouver has performed about as well as any one (economist) could hope for over the past twelve months. When it comes to labour market metrics, the unemployment rate gets the bulk of the attention and for good reason as it’s the most useful as a single metric for evaluating its health. And while the unemployment rate here in Metro Vancouver decreased from 5.3% to 5.1% over the past year, that only tells part of the story (more on that later). In fact, when we look across seven different labour market indicators over the past year, all but one show signs of improvement. In Metro Vancouver we have a growing population of those aged 15+, AKA working-age population, which translates into a growing labour force. Interestingly, our labour force grew by more than the population did, and that’s because our participation rate also increased.
Although the number of unemployed people increased, it's because of a combination of increasing population and a significant increase in the participation rate. This explains why the employment rate increased even though there are more unemployed people. To put it another way, the big change to the labour market over the past year is that there are more working aged people in Metro Vancouver and a greater share of them are engaged in the labour force. So where does the labour market go from here? Well, in the face of high inflation, followed by high interest rates and tightening of monetary policy, the labour market both locally and nationally has proven resilient. We’ll be watching these indicators closely in the coming months to see if there’s deterioration in the labour market, as this is arguably the most important indicator of health in our economy.
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